Mongolia’s Elections: Voters Go to the Polls with Mineral Riches at Stake

The sparsely populated country of steppes and vast forests is a bastion of democracy sandwiched between two authoritarian states. But, after it held parliamentary elections, questions abound about corruption and the legacy of its vast mineral wealth

As birds of prey soared overhead and livestock grazed on the summer’s grassland bounty, Baterdene jumped off his horse and strode into the wooden primary school in Erdene village in Mongolia’s Tov province. The horseman had ridden 15 km to vote in the June 28 parliamentary elections in a country that was one of the world’s fastest growing economies last year because of an unprecedented mining boom.

Driving the polls was the question of how best to divide the proceeds of this natural-resource wealth among Mongolia’s 3 million citizens. After all, 30% of Mongolians live under the poverty line, even as foreign investors jockey for the untapped riches hidden below the vast steppe. Can Mongolia, which boasted an astronomic 17.3% growth in 2011, avoid the kind of natural-resource curse that has foiled countries like Nigeria?

For Baterdene, and the other rural voters who were decked out in their finest traditional brocaded coats for election day, such weighty topics might not have been foremost in their minds. Still the casting of ballots is a cherished ritual in this young democracy. “Elections are about choice, about freedom,” Baterdene said, as he parked his horse next to a scrum of other animals at the school serving as a polling station. “It’s my human right to decide my future.”

Control over that future is being contested by the Mongolian People’s Party (MPP), which is a revamped version of the socialist force that ruled Mongolia from 1921 to ’90, and the Democratic Party, until earlier this year the government’s minority coalition partner. A third party, the breakaway Mongolian People’s Revolutionary Party (MPRP), could siphon off votes from the MPP. Past midnight, votes were still being counted, with local TV stations showing exhausted-looking officials cutting open packets of sealed ballots. Some imported electronic equipment designed to ease the counting process hadn’t worked their magic. But one independent survey conducted before the elections predicted a thin margin of victory for the Democrats.

Mongolia threw off the yoke of Soviet control in 1990 by embracing a democratic political system. Wedged between Russia and China, the landlocked country is a lonely democracy in an autocratic neighborhood. Nevertheless, the Mongolians have embraced a rowdy form of democratic governance that has now seen seven legislative polls since the country spun out of the Soviet orbit. In the prior parliamentary elections four years ago, roughly 70% of the electorate voted, a remarkable turnout given that so many Mongolians are nomads who live in one of the most sparsely populated countries on earth. “Mongolians have the spirit of freedom in their genes,” said President Tsakhia Elbegdorj, as he relaxed on election day at an outdoor barbecue in the woods behind his presidential mansion in Ulan Bator, the country’s capital. (Presidential polls are held separately, and the next contest is due next year.) “Democracy is in our blood.”

The political climate heated up in the spring when former President Nambaryn Enkhbayar of the MPRP was arrested on corruption charges and launched a hunger strike in protest. He was later barred from running in the June 28 parliamentary polls. Enkhbayar, backed by a posse of high-level American supporters, calls the charges a politically motivated strike by Elbegdorj and his Democratic Party; other members of Mongolia’s political elite, along with many in Ulan Bator’s tight-knit expatriate corps, see truth in the graft charges. Whatever the truth, the easy narrative of Mongolia as “the little democracy that could” has been dented.

But the reality is that corruption, whether Enkhbayar is guilty or not, has frayed the edges of Mongolian democracy. Other troubles facing Mongolia are no different from those facing many other frontier economies. Although Mongolia has grown from a $1 billion economy in 2001 to a $10 billion economy a decade later, its fortunes depend heavily on the appetite of resource-hungry nations, most notably China. And even as the economy has profited from a mining boom that has some dubbing the country Mine-golia, social inequality, inflation and unemployment are growing in tandem.

On both sides of the political aisle, leaders acknowledge that graft is rampant when it comes to the awarding of contracts for lucrative mining and other business concessions. Ulan Bator, a sprawl of low-slung concrete blocks, is undergoing a building boom that is making mechanical cranes rivals to the country’s famous eagles. The odd Ferrari glides past on the Soviet-era streets, while Louis Vuitton has planted its flags in a fancy new mall next to the country’s parliament. Yet herders who have lost their livestock to harsh winters or have been displaced by mining projects are forced to live in bleak settlements of traditional nomadic felt tents that ring the capital. The ger districts, as these tent encampments are called, bristle with resentment toward the thin slice of Mongolian society that has gotten so rich so quickly.

Mongolia’s young democracy was further compromised four years ago when the results of the previous parliamentary polls resulted in demonstrators crowding Ulan Bator’s main square and crying voter fraud. Tensions escalated and four people were shot dead by security forces — hardly the kind of image a democratic nation would want to showcase. In the lead-up to Thursday’s polls, the government professed determination to prevent another outbreak of violence. Polling stations were outfitted with special scanners that were supposed to immediately record the paper ballots, reducing the chance of ballot-box fixing. One day before the polls, all parties were ordered to remove their campaign posters and paraphernalia from the streets. In a country where alcoholism is rampant, the government declared a dry day on election day.

If the streets were quiet, the rhetoric from the political parties was not. All have, to some extent, resorted to resource nationalism, promising voters that they will best protect Mongolia’s natural resources. A few years ago, Mongolia became a foreign investor’s darling, in part because there were so few restrictions on setting up shop locally. But as the public worries about the environmental effects of Mongolia’s mining spree and wearies of the lack of a trickle-down effect from the country’s natural wealth, populism is taking hold. The MPP-led government said it tried to share the profits from mining through cash handouts to all Mongolians — a controversial policy. Limits on mining in certain regions, like heavily forested areas, have been announced, although it’s not clear how strictly such restrictions are being enforced. A moratorium on new mining licenses also holds for now. In a transparent pre-election move, the parliament rushed through a foreign-investment law designed to potentially limit, or at least more carefully review, certain types of overseas investment. Although some analysts expect the law to be softened after the elections, other foreign investors are feeling spooked.

Anti-Chinese sentiment, which is rooted in centuries of wariness of Mongolia’s giant southern neighbor, has also bubbled up — a tricky situation given that China currently gobbles up 90% of Mongolia’s exports. The newly passed foreign-investment law came on the heels of an attempt by a state-owned Chinese firm to take over a Mongolian coal company. Throughout, Mongolians must keep a careful eye on the trajectory of global commodity prices. One downturn in one mineral could shave a percentage point off GDP growth, and if China slows, Mongolia surely will too.

Meanwhile, a line of voters waited patiently at the Erdene school to vote. From the line, Baatar described the joys of democracy, even if plenty of others in the district said they have seen no real benefit from the promises made by local politicians four years ago. “In Mongolia, elections are the best system because we like to do things our own way,” said the 54-year-old, who worked for decades as an engineer in a coal mine. “Tell me, in America, do you also have elections like we do in Mongolia?”